Exit Strategies for Angel Investors & Entrepreneurs Part 2

BY Basil Peters

Exit Strategies for Angel Investors and Entrepreneurs – Part 2

From the Angel Capital Association Annual Summit, Atlanta, April 15, 2009

Highlights of Part 2:

  • How the math behind VC funds affects the ‘time to exit’ for entrepreneurs and angel investors.
  • The average lifetime of IT venture capital funds is now over 15 years.
  • Without VCs, entrepreneurs and angels have a reasonable chance of exiting in 3 to 5 years.
  • If the company accepts an investment from a VC, it statistically extends the time to exit by about a decade.
  • Why accepting money from a venture capital fund will also increase the risk of failure.
  • Exit objectives are well aligned for entrepreneurs and angels. That’s not usually the case with VCs.
  • Angels are starting to co-invest (syndicate) and can now provide $5 to 10 million of capital to one company.
  • Rob Wiltbank’s data shows what happens to angels and entrepreneurs after VCs invest.
  • Why the optimum strategy is to have angel investors or VCs – but not both.
  • A simple set of criteria to decide if a company should have angel or venture capital investors.
  • The optimum financing and exit strategies for Angels and Entrepreneurs.

Part 1 of this talk is available here.